Delhi District Court
Davender Trailers Transport Company vs Tratec Engineers Pvt. Ltd on 2 April, 2019
IN THE COURT OF SHRI GIRISH KATHPALIA,
DISTRICT & SESSIONS JUDGE
SOUTH EAST : SAKET COURT, NEW DELHI.
Suit No. 103/2013 (207188/2016)
DAVENDER TRAILERS TRANSPORT COMPANY
JHAJJAR ROAD, OPP. UJJWAL GARGEN
BAHADURGARH, DISTT. JHAJJAR
HARYANA 124507
THROUGH ITS PROPRIETOR SHRI DAVENDER SINGH
....PLAINTIFF
VERSUS
TRATEC ENGINEERS Pvt. Ltd.
REGISTERED OFFICE AT 440, KAILASH TOWERII
EAST OF KAILASH, NEW DELHI 110065
....DEFENDANT
Date of filing the application : 13.11.2013
First date in this court : 06.05.2017
Arguments concluded on : 11.03.2019
Date of Decision : 02.04.2019
APPEARANCE : Shri Sanjeev Narang, counsel for plaintiff
Shri Dhrupad Das, counsel for defendant
JUDGMENT
1. Plaintiff, being proprietor of sole proprietorship concern namely Devender Trailers Transport Company, filed this suit for recovery of Rs. 3,02,500/ with pendentelite and future Suit no. 103/2013 (207188/2016) Page 1 of 15 pages Davender Trailers Transport Co. vs Tratec Engineers interest. The defendant company contested the suit by way of detailed written statement and on the basis of issues framed by my predecessor, trial was conducted. I have heard learned counsel for both parties who took me through records.
2. Briefly stated, factual matrix set up in the plaint is as follows.
2.1 Plaintiff is engaged in business of providing transportation services and has to keep at his disposal or under ownership a fleet of vehicles of different sizes and capacities so as to be in a position to offer services to his clients. Defendant company is engaged in design, development, manufacture and marketing of a complete range of trailers (transportation vehicles) inside and out of India.
2.2 As a matter of marketing strategy, defendant company remained in contact with those involved in the business of transportation and executives of defendant used to visit plaintiff to provide knowledge and necessary information on vehicles produced and technology adopted by the defendant besides prices and other competitive aspects.
Suit no. 103/2013 (207188/2016) Page 2 of 15 pages Davender Trailers Transport Co. vs Tratec Engineers 2.3 In the month of May 2011, staff of defendant visited the plaintiff and impressed upon the latter to purchase trailers, which plaintiff required for use in immediate future for his business expansion. Between the parties, specifications of the trailers needed by plaintiff, price structure, delivery schedule and payment terms etc were finalized and parties decided to reduce the agreed terms into writing by way of appropriate document format so as to rule out any ambiguity in future, especially because requirement of such trailers by plaintiff was essentially within a specified period. Accordingly, consequent to finalization of discussions, defendant company raised a proforma invoice of value Rs. 1,91,35,721/ on plaintiff, describing all details related to model, units/quantity, price, delivery date, payment terms and other conditions.
2.4 Thereafter, defendant company called upon plaintiff to issue Purchase Order according to the standard policy/procedure adopted by defendant company for execution of such high value orders and in that regard, format of the Purchase Order was sent by email on 08.06.2011 by the defendant, directing the plaintiff to take a print out of the same on plaintiff's letter head and send the same to defendant company with signatures of plaintiff.
Suit no. 103/2013 (207188/2016) Page 3 of 15 pages Davender Trailers Transport Co. vs Tratec Engineers 2.5 In compliance, plaintiff issued the Purchase Order on 09.06.2011 for purchase of hydraulic Modular Trailer HB series of same value and on same terms and conditions as mentioned in the proforma invoice alongwith a cheque of Rs. 5,00,000/ in favour of defendant company towards advance money. The said cheque of Rs. 5,00,000/ was duly encashed to the credit of defendant company on 11.06.2011.
2.6 But despite having accepted the advance payment of Rs. 5,00,000/, the defendant company did not deliver the trailers which caused losses - both short term and long term - to plaintiff in terms of business projection and planning. Therefore, by way of communication dated 13.02.2012, plaintiff canceled the Purchase Order and called upon the defendant to refund the amount of Rs. 5,00,000/ which had been paid as advance consideration.
2.7 In pursuance of the above mentioned communication dated 13.02.2012, the defendant company transmitted electronically a sum of Rs. 2,50,000/ in the bank account of plaintiff towards 50% of the advance payment, but retained the balance 50% without any reason and without any communication to plaintiff in that regard.
Suit no. 103/2013 (207188/2016) Page 4 of 15 pages Davender Trailers Transport Co. vs Tratec Engineers 2.8 When despite repeated requests of plaintiff, the balance amount of Rs. 2,50,000/ was not refunded by defendant, legal notice dated 01.08.2012 was got issued by plaintiff. In reply dated 25.08.2012, the defendant company refused to refund the balance 50% of the advance money.
2.9 Hence the present suit for recovery of Rs. 3,02,500/ consisting of the principal outstanding of Rs. 2,50,000/ and presuit interest thereon at a rate of 12% per annum.
3. In its written statement, defendant company denied the pleadings set up by plaintiff and pleaded as follows.
3.1 Suit of plaintiff is barred on account of "non cancellation" clause which forms part of the agreement between the parties. Since it is the plaintiff who canceled the agreement to purchase specialty trailers, plaintiff is not entitled to any money in view of the said noncancellation clause.
3.2 Defendant had performed its part of contract by constructing, fabricating and manufacturing the ordered trailers at great personal expense, so plaintiff having canceled the agreement cannot be extended benefit of his own wrong.
Suit no. 103/2013 (207188/2016) Page 5 of 15 pages Davender Trailers Transport Co. vs Tratec Engineers 3.3 Defendant had manufactured the ordered trailers and had kept the same ready for delivery within the period contemplated by the proforma invoice but it came as a shock for defendant to receive communication dated 13.02.2012 from plaintiff nearly eight months after placing of proforma invoice. By that time, defendant had spent considerable amount of money on designing, fabricating and manufacturing the trailers. By that time, defendant had also obtained the necessary government approvals and licenses for manufacture and sale of specialized trailers.
3.4 However, subsequently when officials of defendant met plaintiff, the latter expressed that he was passing through financial difficulties and needed money desperately, so he wanted refund. Believing the assurance of plaintiff that upon improvement of financial condition he shall honour the agreement, defendant company refunded half the advance money received from him.
3.5 Defendant was shocked to receive the legal notice dated 01.08.2012 and it sent reply dated 25.08.2012 to the same.
3.6 Defendant company kept the trailers at its premises after incurring cost of Rs. 1,91,35,721/.
Suit no. 103/2013 (207188/2016) Page 6 of 15 pages Davender Trailers Transport Co. vs Tratec Engineers 3.7 Therefore, the suit is liable to be dismissed.
4. On the basis of pleading, my learned predecessor framed following issues.
(i) Whether the plaintiff is entitled to a decree of recovery of money, if so, how much?
(ii) Whether plaintiff is entitled to interest, if so at what rate and for which period?
(iii) Relief
5. In support of his case, plaintiff appeared as his solitary witness, while in support of defendant's case, its authorized signatory appeared as its solitary witness. In his testimony as PW1, plaintiff deposed on oath the above mentioned contents of his plaint and proved on record documents Ex. PW1/1 to Ex. PW1/8. On the other hand, the authorized representative of defendant in his testimony as DW1 deposed on oath the above mentioned contents of written statement.
6. Having heard learned counsel for both sides my issuewise findings are as under.
Suit no. 103/2013 (207188/2016) Page 7 of 15 pages Davender Trailers Transport Co. vs Tratec Engineers ISSUE No. 1
7. Learned counsel for plaintiff took me through the above mentioned pleadings and evidence and contended that plaintiff has proved his case by way of cogent and reliable evidence, and defence raised by the defendant is bogus. It was argued by learned counsel for plaintiff that time was essence of the contract but defendant did not adhere to the same and that caused extensive loss to plaintiff. On the other hand, learned counsel for defendant argued that the trailers in question were specialized and tailormade to suit requirements of plaintiff, as such plaintiff could not be allowed to unilaterally cancel the contract. Learned counsel for defendant took me through the proforma invoice Ex. PW1/1 and pointed out that according to the same, plaintiff was duty bound to pay 25% of consideration in advance which amount came to be approximately Rs. 25,00,000/ but he paid only Rs. 5,00,000/. It was argued by learned counsel for defendant that defendant did not sue plaintiff for cost of trailers only to maintain good relations with him. In rebuttal arguments, learned counsel for plaintiff contended that DW1 had no authority to adduce evidence on behalf of defendant and as such there is no evidence on behalf of defendant in this case.
Suit no. 103/2013 (207188/2016) Page 8 of 15 pages Davender Trailers Transport Co. vs Tratec Engineers
8. To summarize, the factual matrix culled out from the above mentioned pleadings and evidence is that plaintiff ordered manufacture of specialized trailers worth Rs. 1,91,35,721/ by paying an advance amount of Rs. 5,00,000/ but since defendant did not deliver the trailers despite time being the essence of contract, plaintiff canceled the order and demanded refund but defendant refunded only Rs. 2,50,000/; and that according to defendant, the proforma invoice contemplated an advance payment of Rs. 25,00,000/ which was not paid by plaintiff causing loss of Rs. 1,91,35,721/ to the defendant towards cost of trailers kept ready to be delivered; and that in view of non cancellation clause in the contract, order for delivery of specialized trailers could not be canceled; and that Rs. 2,50,000/ was refunded to plaintiff only on humanitarian grounds to help him out of financial difficulties.
9. In his chief examination as PW1, plaintiff specifically deposed that time was essence of the contract as his requirement of such trailers was essentially for a specified period. Despite substantial crossexamination, testimony of PW1 in that regard was not challenged. Rather, in crossexamination, PW1 stated that the trailers were not available at the right time, but even that statement was not challenged further by crossexamination. Not only this, Suit no. 103/2013 (207188/2016) Page 9 of 15 pages Davender Trailers Transport Co. vs Tratec Engineers even the authorized representative of defendant in his cross examination as DW1 admitted that the specialized trailers were to be manufactured and supplied to plaintiff within specified time.
10. Further, in his crossexamination as PW1, plaintiff stated that 100% payment had to be made at the time of delivery of the trailers and not before that; that he did not give any written notice to defendant regarding delay in delivery of trailers but had visited plant of defendant 23 times to remind orally about the delivery.
11. On the other hand, in his crossexamination as DW1, the authorized representative of defendant admitted that the amount of Rs. 5,00,000/ was received by the defendant company towards advance sale consideration of five customized trailers by way of proforma invoice Ex. PW1/1, email Ex. PW1/2 and Purchase Order Ex. PW1/3. In his crossexamination, DW1 reiterated that the amount of Rs. 2,50,000/ was refunded to plaintiff as the latter had expressed financial crunch in clearing hospitalization bills of some relative.
12. It is not disputed that defendant accepted the Purchase Order alongwith a sum of Rs. 5,00,000/ paid by plaintiff as advance Suit no. 103/2013 (207188/2016) Page 10 of 15 pages Davender Trailers Transport Co. vs Tratec Engineers payment. Admittedly, having accepted Rs. 5,00,000/ as advance payment, defendant never demanded a further sum of Rs. 20,00,000/ in order to make it 25% advance. It shows that printed terms of proforma invoice were not acted upon by the parties.
13. It is also not disputed that out of the said advance of Rs. 5,00,000/, defendant refunded a sum of Rs. 2,50,000/ to plaintiff but retained the remaining Rs. 2,50,000/. Explanation rendered by defendant that it refunded Rs. 2,50,000/ because plaintiff represented that he needed money to foot the hospital bills of his relative does not sound believable in the absence of any further evidence reflecting any closeness of relations between the parties. It was plain and simple commercial relationship between the parties and in such relations, it is not believable that out of such humane considerations, the defendant company would be so charitable. And in case if it is so believed, it remains not understandable as to why would the defendant company not further help the plaintiff by paying him the balance amount of Rs. 2,50,000/ in his financial rough weathers.
14. Further, defendant did not bring even a shred of evidence to show that the customized trailers were ever ready to be delivered. Rather, in para 16 of his chief examination affidavit, Suit no. 103/2013 (207188/2016) Page 11 of 15 pages Davender Trailers Transport Co. vs Tratec Engineers DW1 stated that defendant started manufacture of trailers only after refunding Rs. 2,50,000/ to plaintiff.
15. Explanation of defendant that they did not sue the plaintiff for recovery of cost of those customized trailers only to keep good relations between the parties does not appeal to reason. On the one hand, the defendant company claims to have opted not to sue the plaintiff for recovery of Rs. 1,91,35,721/ to maintain good relations and on the other hand, the defendant company opts not to pay a comparatively petty amount of Rs. 2,50,000/ to plaintiff. Even after the plaintiff suing the defendant company for Rs. 2,50,000/, defendant company deciding not to sue the plaintiff for Rs. 1,91,35,721/ in the name of good relations sounds absurd.
16. Thence, there is nothing on record to support the stand of the defendant that parties had bound themselves strictly to the printed terms of proforma invoice or that the ordered specialized trailers were ready to be delivered not just within time which was essence of the contract but even thereafter till date. Therefore, cancellation of order by plaintiff was perfectly lawful. That being so, defendant cannot be allowed to wriggle out of its liability to refund the balance advance money.
Suit no. 103/2013 (207188/2016) Page 12 of 15 pages Davender Trailers Transport Co. vs Tratec Engineers
18. In view of above discussion, issue no. 1 is decided in favour of plaintiff and it is accordingly held proved that plaintiff is entitled to refund of Rs. 2,50,000/ to be paid by the defendant.
ISSUE No. 219. Plaintiff has claimed pre suit interest at a rate of 12% per annum from 13.02.2012 as well as pendente lite and future interest on the amount of Rs. 2,50,000/.
20. In a chain of judgments, reported as Rajendra Construction Co. vs Maharashtra Housing & Area Development Authority, (2005) 6 SCC 678; McDermott International Inc. vs Burn Standard Co. Ltd., (2006) 11 SCC 181; and State of Rajasthan vs Ferro Concrete Construction Pvt. Ltd., (2009) 3 Arb. LR 140 (SC), the Hon'ble Supreme Court of India mandated that courts must reduce the high rates of interest on account of the consistent fall in the rates of interest in changed economic scenario.
21. The rate of 12% for pre suit, pendente lite and future interest as claimed by plaintiff is on higher side. Going by the overall circumstances of this case in the light of above quoted law, Suit no. 103/2013 (207188/2016) Page 13 of 15 pages Davender Trailers Transport Co. vs Tratec Engineers simple interest at a rate of 7% per annum on the outstanding amount would be fair and appropriate.
22. As mentioned above, Purchase Order was canceled by plaintiff by way of communication dated 13.02.2012. Thence, defendant illegally retained the advance amount of Rs. 2,50,000/ after that date. That being so, plaintiff is held entitled to interest on the said amount of Rs. 2,50,000/ at a rate of 7% per annum from 13.02.2012 onwards till filing of this suit and even thereafter till actual payment.
23. Issue no. 2 is decided in favour of plaintiff and it is accordingly held that plaintiff is entitled to simple interest on the outstanding amount of Rs. 2,50,000/ at a rate of 7% per annum for the period from 13.02.2012 till actual payment.
ISSUE No. 3 (Relief)
24. In view of above findings, suit is decreed with cost in favour of plaintiff against defendant for a sum of Rs. 2,50,000/ with simple interest thereon at a rate of 7% per annum for the period from 13.02.2012 till the date of actual payment.
Suit no. 103/2013 (207188/2016) Page 14 of 15 pages Davender Trailers Transport Co. vs Tratec Engineers
25. Decree sheet be accordingly drawn. File be consigned to records.
Announced in the open court on
this 02nd day of April, 2019 (GIRISH KATHPALIA)
District & Sessions Judge
Digitally signed South East, Saket Courts
by GIRISH
KATHPALIA New Delhi 02.04.2019 (a)
GIRISH
Date:
KATHPALIA 2019.04.03
15:24:02
+0530
Suit no. 103/2013 (207188/2016) Page 15 of 15 pages
Davender Trailers Transport Co. vs Tratec Engineers